Deduction Calculations

Global Payroll for Malaysia comes with 12 deductions for EPF amounts.

See Understanding the EPF Contribution Process.

Global Payroll for Malaysia comes with four deductions for SOCSO deduction amounts.

See Understanding the SOCSO Contribution Process.

Global Payroll for Malaysia comes with eight deductions for tax deduction amounts.

See Understanding Income Tax.

The leave without pay (LWOP) deduction is entered or generated as a result of an approved unpaid absence event occurring in the period.

This deduction uses a unit × rate calculation rule. The system calculates the units by counting the workable days of unpaid leave. The rate LVE FM UNPLRATE is derived from the payee's standard daily rate by dividing the monthly rate by the calendar days. You use this deduction to pay the absence take LWOP. This amount is then taken from the gross amount.

This deduction element contributes to the SOC AC INCOME SEG, ERN AC LEAVE, and EPF AC GROSS accumulators.

You use the LN DEDUCT deductions to recover the amount that is paid for loans. The deduction is taken when an amount exists in the loan balance accumulator. Each loan deduction element uses a variable (LN VR DED) to calculate the loan repayment according to the specifications that are established in the loan feature. No generation control or special proration rule exists.

When used, the loan deductions (LN DEDUCT 1 company loan, LN DEDUCT 2 housing loan, and LN DEDUCT 3 car loan) contribute to the NET PAY accumulator.

Global Payroll for Malaysia enables you to pay festive advances through the payroll system. However, because the payments are advances, they must be recovered through deductions in subsequent pay periods. Separate customary deductions corresponding to each of the festive advance types and their supporting elements enable you to deduct the festive advance amount in subsequent payments. This enables you to recover the entire outstanding festive advance payments when an employee is terminated.

You specify the deduction elements that are to be used for the recovery of the festive advances on the Festive Advance Pay Program page in HR.

Deduction elements all use a calculation rule of base × percent, where the base is derived from accumulator FAD AC ADV AMT and the percentage can be entered.

The following festive advance deductions enable you to recover festive advance payments by subtracting from the FAD AC ADV AMT accumulator:

• XMAS DD PB (Christmas advance payback).

• HARI RAYA DD (Hari Raya advance payback).

• DEEPAV DD PB (Deepavali advance payback).

• CNY DD PB (Chinese New Year advance payback).

The system issues a warning message when a payee's total deductions exceed a defined percentage of wages within a processing period. This check is not done for terminated employees. To perform this calculation, the system uses accumulators MYS WAGES and MYS DEDUCTION to total the month's wages and deductions, variable CMN VR MAXPCTDED to hold the maximum deduction percentage, and formula CMN FM DEDLIMIT to test whether the limit is exceeded and to issue a warning. Variable CMN VR MAXPCTDED maintains a limit of 50 percent. This increases to 75 percent when the housing loan deduction (LN DEDUCT 2) is present.